Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Governor Pritzker delivered a speech yesterday with three new key steps to keeping the delta variant cases from exploding here in Illinois. See below for full recap.
Senate action on a $1 trillion bipartisan infrastructure bill has slowed to a crawl as lawmakers haggle over more than 250 proposed amendments to the legislation. What to expect with the amendments: In several instances, senators are holding their colleagues’ amendments hostage by objecting to voting on them unless their own priorities are also guaranteed a vote. But with nearly 300 amendments filed, not everyone is going to get their proposed changes to the legislation on the Senate floor, fueling frustrations among senators on both sides of the aisle.
Senators say they expect the bipartisan package to come up for a final series of votes as soon as this weekend. But the timing will depend on whether Republican senators, in particular, feel they’ve been given enough chance to make changes to the legislation.
Read below for more interesting pieces of news, but check out some important reminders first:
Add Monday, August 16 to your calendars as we host our quarterly “Legislative Coffee” with U.S. Representatives Bill Foster, Lauren Underwood, and Marie Newman. We’ll cover topics such as the budget, infrastructure, taxes, the recent executive order, and more. We’ll begin at 8 am and discuss through 9:30 at the Joliet City Hall Council Chambers. We hope you can join us and thank CITGO for being our coffee series sponsor. Here is the rsvp & info link: http://jolietchamber.chambermaster.com/events/details/2021-legislative-coffee-series-august-16th-with-u-s-representatives-foster-underwood-newman-6082
*Government Affairs Roundup brought to you by Silver Cross Hospital*
Gov. Pritzker Announces Mask Requirement for Pre-K-12 Schools, Long-Term Care Facilities, to Prevent Spread of Highly Transmissible COVID-19 Delta Variant
As COVID-19 infection rates across the state continue to increase and with a number of school districts not yet adopting CDC guidance on masking, Governor JB Pritzker and IDPH Director Dr. Ngozi Ezike announced masks will be required for students, teachers, and staff at pre-kindergarten-12th grade schools and day cares across the state. The new requirement formalizes CDC guidance released in July on universal masking for both unvaccinated and vaccinated people in schools to ensure a safe return to classrooms.
The governor also announced his intent to require all state employees working in congregate facilities to receive the COVID-19 vaccine by October 4th. The state is informing the unions representing these employees of its intention to move forward with this requirement, which covers employees at the Departments of Human Services, Veterans’ Affairs, Corrections and Juvenile Justice working in congregate facilities. The state is also requiring universal masking in private long-term care facilities and strongly encourages owners of private facilities to join the state in adopting vaccination requirements.
The new measures are part of the state’s ongoing effort to combat a new surge as the Delta variant rapidly spreads among the unvaccinated. Since COVID-19 metrics reached their lowest points earlier this summer, cases have soared by a factor of nearly 10, hospitalizations and ICU rates have more than doubled in a month, and the number of COVID patients requiring a ventilator has multiplied nearly 2.5 times over since July 16th. In June, 96 percent of people hospitalized in Illinois with COVID-19 were unvaccinated or only partially vaccinated, with the majority of those hospitalizations occurring in residents under 60 years old.
“Given our current trajectory in hospitalizations and ICU usage, we have a limited amount of time right now to stave off the highest peaks of this surge going into the fall,” said Governor JB Pritzker. “To combat the Delta variant, Illinois is taking three key steps to protect our state’s 1.8 million unvaccinated children under 12 and their families, residents and staff of long-term care facilities, and those highly vulnerable people who rely upon state employees for their daily care. I also encourage every Illinoisan who is eligible to get vaccinated as soon as possible, as millions of their neighbors already have. This vaccine is safe, effective, and essentially eliminates the risk of hospitalization and death even from the Delta variant. In short, it’s the best tool we have.”
“Vaccination is the best way we can prevent further spread, hospitalizations, and deaths due to COVID-19 and the Delta variant,” said IDPH Director Dr. Ngozi Ezike. “Data show that the vaccines are preventing severe illness, hospitalization, and death, and are effective against the Delta variant. We have the tools to turn the tide of another wave, but we need people to use them.”
In preparation for the start of the upcoming school year and in response to the highly contagious Delta variant, all students, teachers, and staff at pre-kindergarten – 12th grade schools and day cares will be required to wear masks regardless of vaccination status, effective immediately. This guidance is in line with recommendations from the CDC.
The state is also requiring universal masking in long-term care facilities regardless of vaccination status.
Illinois is home to 1.8 million children under the age of 12 who are not yet eligible to receive the COVID-19 vaccine. With the Delta variant infecting the younger population at a greater rate and with people under 29 years old now accounting for 12 percent of COVID hospitalizations in June, requiring the use of masks is the most effective tool to allow students to return to their classrooms safely while protecting them from the virus. Mask wearing will also help prevent unvaccinated students from transmitting the virus to more vulnerable members of their broader communities.
The mask requirement is inclusive of youth sports and activities, with masks now required for all indoor extracurriculars and sports. In line with CDC guidance, masks are not required for activities outdoors where transmission risks and rates are lower.
The administration is providing free testing to all pre-K-12 schools in Illinois outside of Chicago, which received a separate federal funding allocation for testing.
IDPH also provided additional guidance for students and staff who are exposed to someone who tests positive for COVID-19. Close contacts of a positive case can remain in school if they receive testing on days one, three, five, and seven post exposure and if they wore masks at the time of exposure.
To help schools across the state protect the health and safety of students and staff, the Illinois Emergency Management Agency (IEMA) has distributed 2.5 million free face masks to public schools since the beginning of the pandemic. The free masks grant every child the ability to access the learning opportunities provided by their school in person, regardless of their ability to purchase a face covering or make one at home. The administration will continue to supply masks to school districts as they request assistance.
From the beginning of the COVID-19 pandemic, the Pritzker administration has implemented policies and guidelines in accordance with the Centers for Disease Control and Prevention (CDC) aimed at protecting the state’s most vulnerable residents. With the Delta variant causing a rapid increase in infection rates across the nation and Illinois, the state is taking additional steps to slow the spread of the virus in congregate facilities, where residents are most vulnerable.
With vaccination rates among residents in state congregate facilities largely being significantly higher than rates among staff, approximately 80 percent of the new COVID-19 cases in state-operated congregate care facilities have been due to infection among employees. However, the individuals in these facilities, who frequently lack the ability to live on their own, are bearing the brunt of the consequences of unvaccinated workers as their hospitalization rate due to the virus increases.
The state is notifying the unions representing all employees who work in 24-7 state-operated congregate living facilities of the intent to require that these employees receive the COVID-19 vaccine by October 4th. This includes employees who work in state veterans’ homes, developmental centers, correctional facilities, and juvenile justice facilities. Increased vaccination rates will help prevent and slow community spread, reduce the likelihood of infecting vulnerable populations, and allow for potentially less-severe illnesses for those who contract COVID-19 post vaccination. State agency leaders will ensure ongoing vaccination opportunities for employees at state-run facilities, as they have since vaccine was first made available to employees.
Governor Pritzker urged privately-owned and operated long-term care facilities to implement a similar vaccination requirement for their employees to protect the vulnerable residents they serve.
All Illinois residents over the age of 12 are eligible to receive the COVID-19 vaccine at no cost and proof of immigration status is not required to receive the vaccine. To find a vaccination center near you, go to vaccines.gov.
President Biden / CDC Announce New Eviction Ban
President Biden is attempting to thread the needle by replacing a lapsed federal eviction ban with new protections designed to keep millions of Americans from losing their homes amid surging coronavirus cases. The Centers for Disease Control and Prevention (CDC) on Tuesday night imposed a new, narrower moratorium to replace the one that expired Sunday. But there are already questions about the legality of the order.
The CDC said it is prohibiting evictions in counties with high rates of COVID-19 transmission through Oct. 3, aligning with areas where the agency has asked Americans to wear masks in public indoor settings even if vaccinated. The ban is expected to cover 90 percent of the U.S. population and 80 percent of counties.
“This is a tremendous relief for millions of people who were on the cusp of losing their homes and, with them, their ability to stay safe during the pandemic,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition, in a Tuesday statement.
The move offers a reprieve to the intense political pressure Biden was under from Democrats to issue another ban as the delta variant tears through some of the most eviction-vulnerable communities in the U.S. Though some residents are protected by similar state moratoria, many more were scrambling to secure some form of shelter. The Aspen Institute estimated that as many as 15 million Americans across 6.5 million households were facing eviction this month.
Tuesday’s order was an about-face of sorts. White House officials on Monday had pledged to explore the limits of the president’s powers on renewing the ban, while at the same time saying the CDC lacked the authority to issue an extension without an act of Congress.
“To date, the CDC director and her team have been unable to find legal authority, even for a more targeted eviction moratorium that would focus just on counties with higher rates of COVID spread,” said Gene Sperling, Biden’s economic recovery czar, on Monday.
Comments like those, along with a Supreme Court ruling this summer, are raising questions about whether Tuesday’s order will be able to withstand legal scrutiny. The Supreme Court in late June upheld the CDC’s previous moratorium but warned that a further extension of the ban beyond its July 31 deadline would exceed the agency’s authority unless Congress passed a law to expand it.
Biden on Tuesday acknowledged that the new order stood on tenuous legal ground but said it was worth the risk. “Whether that option will pass constitutional measure with this administration, I can’t tell you. I don’t know,” Biden said. “There are a few scholars who say it will, and others who say it’s not likely to. But, at a minimum, by the time it gets litigated it will probably give some additional time while we’re getting that $45 billion out to people who are in fact behind in the rent and don’t have the money.”
With the new CDC eviction moratorium slated to expire in two months, assuming it survives any legal challenges, more needs to be done to boost awareness surrounding the rental aid.
Pritzker Administration Provides More Than $185 Million in Assistance to Help Tenants Avoid Eviction
As the state’s gradual phaseout of the pandemic eviction moratorium continues, Governor Pritzker and the Illinois Housing Development Authority (IHDA) announced the administration has distributed more than $185 million in emergency rental assistance to 22,200 Illinoisans through the Illinois Rental Payment Program (ILRPP).
In addition, IHDA announced it has completed the review of all 70,000 applications received during the first application round in June, with an additional 25,000 applications currently in the pipeline to review from the second round. Landlords with in-progress applications already initiated by their tenants are encouraged to complete their portion of the application before the deadline on Sunday, August 15.
“It is critically important to keep families across the state in stable housing for both the health of our communities and to help our state rebuild from the pandemic,” said Governor JB Pritzker. “That’s why my administration continues to do everything we can to provide much-needed support for Illinois residents who have been hit hardest by the pandemic. I’m proud that last year, Illinois was the best in the nation at getting relief to renters and homeowners. And as the eviction moratorium phases out, we remain committed to helping families get and keep the affordable housing they deserve.”
Early in the COVID-19 pandemic, Governor Pritzker announced a statewide eviction moratorium for tenants while launching emergency assistance programs that included extensive relief for renters, landlords, and homeowners. These efforts helped stave off a wave of evictions and foreclosures that would have led to unprecedented housing instability, increasing the risk of spreading COVID-19. From July to December 2020, IHDA provided $230.6 million in emergency rental assistance to 46,129 households and $98.5 million in emergency mortgage payment assistance to 10,071 households.
Building on existing efforts to ensure the state’s most vulnerable residents keep a roof over their head, Governor Pritzker announced a new round of rental assistance in May 2021 to deliver more than $500 million to 63,000 households. On July 29, the Governor signed landmark legislation that created new programs and incentives to support affordable housing throughout the state, including a new $75 million program to finance affordable rental housing in areas impacted by the pandemic.
“IHDA is proud to have reached this benchmark of helping over 22,000 Illinois renters with more than $185 million in emergency rental assistance, but we know there is more work to do,” said IHDA Executive Director Kristin Faust. “There are hundreds of millions of dollars still available, and our staff is reviewing applications as quickly as possible to make sure this funding reaches those in need.”
To date, IHDA has received nearly 95,500 completed ILRPP applications from renters and landlords in 100 of Illinois’ 102 counties. IHDA has approved 22,250 applications and paid out more than $185 million to renters experiencing hardships due to the pandemic. Approximately 61% of the approved applications to date have assisted households who have been unemployed for more than 90 days, and 63% of approvals have assisted extremely-low-income households. The program has provided an average of $8,814 per household, covering up to 12 months of past due rent and up to three months of future rent. According to data from the U.S. Treasury, Illinois was the second highest provider of rental assistance among all grantees in June.
IHDA continues to review applications as quickly as possible and is prioritizing requests from tenants who are unemployed and those with extremely low household incomes. IHDA is also working with tenants who have submitted incomplete applications to help them assemble the missing documentation necessary to approve funding.
In addition, the Illinois Department of Human Services (DHS) has programs available to households in need and has awarded over $187 million in assistance to Illinois residents. Assistance has ranged from direct aid for immigrant communities, legal and court-based assistance and funding for service providers and non-profits. To see if you are eligible for any of these programs, please visit: www.illinoisrentalassistance.org.
On July 23, the Governor issued an Executive Order that allows eviction filings against covered persons to begin on Sunday, August 1. The current prohibition on enforcement of eviction orders entered against covered persons will remain in place until Tuesday, August 31. Enforcement of eviction orders entered against covered persons will be allowed September 1 and beyond.
The Illinois Supreme Court has issued an order temporarily staying all trial and judgments in residential eviction proceedings involving covered persons, with some exceptions. The order takes effect August 1 and expires September 1, 2021.
Additional rounds of rental assistance, as well as the Illinois Homeowner Assistance Fund (ILHAF) that will provide mortgage assistance, will be announced in the coming months. For updates to these programs, visit: www.ihda.org.
Gov. Pritzker Signs Landmark Legislation Expanding Affordable Housing Funding and Incentives
Building on efforts to increase the supply of affordable housing, Governor JB Pritzker signed House Bill 2621 into law, creating new financing programs and tax incentives to support the creation and preservation of affordable housing in communities across Illinois. This landmark legislation includes several provisions aimed at reducing the shortage of affordable housing and builds on efforts to support housing stability in areas disproportionally impacted by COVID-19. The bill passed both the House and Senate with unanimous bipartisan support.
The Governor also signed Senate Bill 0265 into law, prioritizing access to the state’s Low-Income Heating and Energy Assistance Program (LIHEAP) for families with young children and expanding access to undocumented residents.
“These two new laws mark another step forward by state government on our collective mission to ensure all our residents have the basic foundation upon which to build a successful future for themselves and their families,” said Governor JB Pritzker. “To date, our COVID-19 relief dollars have helped more than 289,000 families pay their utility bills and over 76,000 families stay in their homes, with tens of thousands more to come. With this legislation, we’ll fund 3,500 new affordable rental units – changing the lives of thousands more families for the better.”
“Everyone deserves a safe, stable, and affordable place to live, and this bill will help us bring housing investment and opportunity to the communities where they are needed most,” IHDA Deputy Executive Director Karen Davis said. “House Bill 2621 is a tremendous step forward in helping IHDA further our mission, and we want to thank Governor Pritzker and the Illinois Legislature for taking action to begin addressing housing affordability needs in our state.”
HB 2621 directs the Illinois Housing Development Authority (IHDA) to create a COVID-19 Affordable Housing Grant Program to support the construction and rehabilitation of affordable rental housing in areas most impacted by the COVID-19 pandemic. This program directs $75 million in federal funding from the American Rescue Plan Act to multifamily development costs to help keep rent affordable for low-income households. The program will supplement properties that qualify for federal low-income housing tax credits and is expected to fund the development and preservation of up to 3,500 affordable rental homes and apartments by the end of 2024.
The bill also extends the Illinois Affordable Housing Tax Credit through 2026 to encourage monetary or real estate donations to affordable housing developments. The program provides a one-time state of Illinois income tax credit equal to 50% of the value of qualified donations to affordable housing developments. Since the program was created in 2001, it has motivated donations of land, buildings or funds to support the development of 21,000 affordable rental units.
In addition, HB2621 will create two separate property tax incentives to support the preservation of affordable housing, including a provision that encourages owners of multifamily buildings with 7 or more units to invest in their properties and keep rents affordable by providing reductions in post-improvement assessed value. The legislation also strengthens existing state law requiring communities with limited stock of affordable housing to create plans to address their local housing needs.
As part of Governor Pritzker’s Help for Illinois Families program, last year DCEO expanded access to LIHEAP utility assistance funds. Since launching the program last June the Department has issued over $343 million in assistance to over 289,000 families statewide. Expanded eligibility created by passage of SB 0265 into law comes just in time as the Department prepares to launch a new program to deploy additional LIHEAP funds authorized by ARPA – with funds set to be made available in September 2021.
For more information on LIHEAP and to determine if you are eligible for utility payment assistance, go to DCEO’s website.
HB 2621 is effective immediately. SB 0265 is effective January 1, 2022.
Secretary of State Jesse White Launching Comprehensive Plan to Address the Heavy Customer Volume at Facilities Caused by COVID-19 Pandemic
Illinois Secretary of State Jesse White is launching a comprehensive plan to address the heavy customer volume at Driver Services facilities due to the COVID-19 pandemic. White’s plan includes two key elements:
• Expanding the appointment pilot program in September to include most Driver Services facilities in the Chicagoland area.
• Expanding remote renewal over the next six months to allow approximately 1 million more people to renew their driver’s licenses and ID cards online, by phone or by mail.
Letters will be mailed out to those who qualify beginning in September until the end of February 2022.
“During the pandemic, my office has continued to serve the public, including face-to-face transactions, in a safe and responsible manner,” said White. “Throughout this time, we also greatly expanded online services. This next step will allow many more people to renew their driver’s licenses or ID cards remotely instead of visiting a Driver Services facility. To further address the heavy customer volume at facilities, my office is expanding the appointment program in September to include most Chicagoland facilities, so customers who must visit a facility can schedule an appointment. Certain designated facilities will still accommodate walk-in customers.”
Expanding the Appointment Program
Beginning the first week of September, customers will be required to make an appointment to visit the following three Chicago facilities: Chicago North, 5401 N. Elston Ave.; Chicago South, 9901 S. Dr. Martin Luther King Jr. Drive; and Chicago West, 5301 W. Lexington St. The days and hours of operation at these facilities will be Tuesday through Friday from 7:30 a.m. to 5 p.m. and Saturday from 7:30 a.m. to 2 p.m. beginning Aug. 2.
Lake Zurich, Melrose Park, Midlothian and Woodstock have been serving as appointment facilities since early this year. These facilities, which also operate Tuesday through Saturday, will continue requiring appointments.
The week of Sept. 7th, many other metro Driver Services facilities will also require appointments. These facilities include Schaumburg, Bridgeview, Lombard, Des Plaines, Waukegan, Naperville, Aurora, Plano and Joliet.
Appointments will be required for customers applying for or renewing REAL IDs, standard driver’s licenses and ID cards, and for behind-the-wheel road tests at these facilities. Customers can visit www.cyberdriveillinois.com to schedule an appointment up to 10 days in advance during this phase of the program. New appointment slots will be available each day at www.cyberdriveillinois.com.
All 16 facilities will have the same standardized days and hours of operation: Tuesday through Friday from 7:30 a.m. to 5 p.m. and Saturday from 7:30 a.m. to 2 p.m.
Secretary White emphasized that seniors, persons with disabilities and expectant mothers will be served as walk-ins at all 16 of the designated appointment facilities.
Beginning in September, customers can schedule an appointment online or by calling the appointment helpline at 844-817-4649. The Secretary of State is partnering with the Chicago Lighthouse to provide these call center services. The Chicago Lighthouse’s call centers offer career opportunities for people who are blind, visually impaired, disabled, veterans and economically disadvantaged.
Larger central and downstate Illinois facilities will implement a customer scheduling system in the near future.
White noted that not all facilities will go to the appointment-based system. Many small, rural facilities will not require the appointment system because they do not encounter the heavy customer volume that large facilities encounter.
Additionally, some Chicagoland facilities will remain accessible to walk-in customers. These facilities include Deerfield, Elgin, Chicago Central (James R. Thompson Center) and the temporary facility at Prairie State College in Chicago Heights.
Expanding remote renewal to address heavy customer volume
Beginning in September and running through February 2022, White’s office will be expanding remote renewal for driver’s license and ID card holders. During this six-month period, the office will mail letters to eligible customers with expired driver’s licenses and ID cards, requiring them to renew online, by phone or by mail. The office estimates that this will eliminate the need for approximately 1 million people to visit a facility.
In addition, White’s office will continue mailing remote renewal letters to drivers and ID card holders 90 days before their cards expire. Through this innovative approach, most customers will be able to renew remotely and avoid visiting facilities. Customers who must visit a facility include first time driver’s license or ID card applicants, first time REAL ID applicants and drivers ages 75 and older who are required by state law to visit a facility when renewing their license.
White continues to encourage people to conduct other business online at www.cyberdriveillinois.com. Aside from driver’s license and ID card renewals for those who qualify, online services include obtaining a duplicate driver’s license or ID card, ordering a driver record and purchasing license plate stickers.
As a reminder, White has extended all driver’s license and ID card expiration dates to Jan. 1, 2022. This extension does not apply to commercial driver’s licenses (CDL) and CDL learner’s permits.
In addition, the U.S. Department of Homeland Security has extended the federal REAL ID deadline to May 3, 2023.
Democrats Scramble for Cash to Cover Biden’s $3.5T Plan
Democrats are scouring for savings and new tax money to bankroll their multitrillion-dollar plan of spending priorities, drumming up a list of options ranging from raising the corporate tax rate to lowering prescription drug costs.
The majority party has said the still-forthcoming bill will be “fully paid for.” But it won’t be easy to raise enough money to offset as much as $3.5 trillion in spending — a sum so massive it would eclipse the total GDP of Spain, Australia and Switzerland combined.
“We’re gonna pay for $3.5 trillion,” insists Sen. Ron Wyden (D-Ore.), who is tasked with raising revenue in his role as chair of the Finance Committee. “We expect to be working all through the summer.”
The package’s architects argue that, in many ways, the bill will eventually pay for itself by boosting the inflow of tax revenue. That “dynamic scoring” strategy will help justify part of the steep price tag, though that method of paying for legislation has spurred criticism from both Democrats and Republicans in the past.
Investments like free community college, childcare assistance and universal pre-kindergarten wouldn’t pay off for well over a decade, however. So, for the bulk of the bill, top Democrats will need to offer up more concrete ideas for counterbalancing their spending — by way of tax hikes and a host of policy changes that are expected to deliver savings in short order.
Here is what’s on the table:
Kill the Medicare rebate rule — Democrats think they could scrounge up as much as $180 billion by rolling back a pharmaceutical policy Donald Trump finalized at the end of his presidency. If they succeed in altogether scrapping Trump’s rule, drugmakers could continue to give pharmacies money to ensure their medicines get choice placement on Medicare plans.
Those rebates can be as much as half the drug’s sticker price. And while they are not passed directly to consumers, insurers argue they use savings to keep premiums low.
Some Republicans in Congress are also warming to the idea of ditching the former president’s rebate policy and allowing the prescription perks to go on.
Hit ‘Mega IRAs’ — Democrats say they’re aghast that hundreds of Americans have IRAs worth more than $25 million, and nearly 30,000 have accounts with balances topping $5 million, while many others have little to no retirement savings. Going after super-sized retirement savings accounts like that could drum up substantial revenue for the $3.5 trillion plan, Democrats say, though an exact figure is unclear.
Roll back the corporate rate — It’s a foregone conclusion that Democrats will propose undoing Republicans’ cut to the corporate tax rate — the question is by how much. It’s a quick and easy way to raise a lot of money: Each percentage point increase generates roughly $100 billion.
Biden wants to raise it to 28 percent, from the current 21 percent, but that’s probably too high for most Democrats. A more likely outcome would be a boost to a rate in the mid-twenties, which even Sen. Joe Manchin (D-W.V.) has said he supports.
Punish scammers — Forcing companies to pay back consumers as restitution for scamming and deception is estimated to produce $29 million in savings over a decade.
A bill already passed the House this summer to empower the Federal Trade Commission to crack down, after the Supreme Court voted to nix the agency’s authority to return billions of dollars to people who have been defrauded over the last 40 years. When the FTC can’t return that relief to harmed consumers, the money would go to the Treasury, and the Congressional Budget Office predicts millions of dollars would flow to the federal government that way each year.
In the Senate, leaders in charge of policy to protect consumers are still working on a bipartisan plan of their own. Sen. Maria Cantwell (D-Wash.) — who chairs the Commerce, Science and Transportation Committee — said she hopes a final “FTC fix” can pass Congress before the $3.5 trillion plan gets rolling. But if not, granting that enforcement authority within the larger plan could help offset the cost of the behemoth package.
Tap foreign profits — Many Democrats want to raise hundreds of billions of dollars by also toughening taxes on big companies’ foreign profits. Some want to tighten the so-called GILTI rules governing “intangible” income from things like patents and other intellectual property. They also want to rewrite — or blow up altogether — another tax known as the Base Erosion and Anti-Abuse tax. Depending on what they do, Democrats could end up raising even more money here than they do with a corporate rate increase.
Siphon from drug savings — Senate Budget Chair Bernie Sanders (I-Vt.) has estimated they could draw as much as $600 billion from various policies to lower the cost of prescription drugs, empowering Medicare to negotiate prices with pharmaceutical companies and helping to offset the cost of the program’s expansion to cover dental, hearing and vision benefits.
But more moderate Democrats and those with districts home to prescription drug companies, like Sen. Bob Menendez of New Jersey, have raised concerns about the potential effects on drug research, development and innovation, complicating caucus consensus on the issue.
Hike the top tax rate — Many Democrats also want to undo Republicans’ cut in the marginal income tax rate. As part of their 2017 tax cuts, Republicans reduced it to 37 percent from 39.6 percent. Democrats want to go back to 39.6 percent. That would be a relatively easy lift for the majority party leaders, who previously increased the rate to 39.6 percent as part of a 2012 budget agreement.
Pare down Medicare Advantage — Lawmakers and outside groups have flagged some form of cuts to the Medicare Advantage system as a potential source of savings in the reconciliation bill. This could take the form of a reduction in the benchmark rate that the government pays private insurance plans to cover some Medicare enrollees.
Increase capital gains — Some Democrats want to hike capital gains taxes, though that will be more controversial, particularly when it comes to a proposal to end a longstanding provision in the code that allows people to pass assets on to heirs free of capital gains taxes when they die. Democrats are already getting an earful from farmers, small businesses and others.
Separately, Biden also wants to require people making more than $1 million to pay ordinary income taxes on their capital gains. The top rate is now about 24 percent.
Beef up IRS enforcement — Spend money to make money. That’s pretty much the approach Democrats want to take to crack down on tax cheats. The majority party wants to inject tens of billions of dollars into the IRS budget, in hopes of raking in more revenue by going after tax dodgers.
President Joe Biden has proposed an $80 billion increase for the tax collection agency, estimating that boost would result in $700 billion in new revenue.
The increase in IRS enforcement funding had been floated as a way to pay for the bipartisan infrastructure plan. But Republicans rebuffed the idea last month, leaving all of the projected savings to instead be used in the $3.5 trillion plan Democrats will try to pass on their own.
One major problem Democrats will face in claiming that savings: A two-decade-old rule prevents lawmakers from paying for legislation with money drummed up by efforts like boosting IRS audits.
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry